Both Britain and Australia have seen rapid, inadequately funded, expansion of student numbers, and increasing central planning. To address these problems, this paper argues (a) that students should pay via a system of income-contingent loans for the private benefits they derive from higher education, and (b) that, within a government-ordained regulatory framework, universities should be free to set fees and student numbers. In the wake of the Dearing Report in 1997, Britain is making progress on (a) by introducing income-contingent loans to cover student’s living costs.